Nineteen percent of households owed student loan debt in 2010, more than double the share two decades earlier, according to a Pew Research Center analysis of government data. Forty percent of households headed by someone younger than age 35 owe such debt, also a record high. The average debtor family owes $26,682 in unpaid college loans, up from $23,349 in 2007.
The U.S. Education Department has released two-year and three-year default rates for student loans that came due in 2009 and 2010. In two years, 9.1 percent defaulted, double the rate six years ago. Defaults rose to 13.4 percent in three years.
The default rates don’t include borrowers who’ve deferred payment because of hardship, such as unemployment, notes the Wall Street Journal. ”Over the long haul, the government projects that nearly 1 in 5 borrowers will default on federal student loans.”
Borrowers can link repayments to their discretionary income; the balance will be forgiven after 20 years. But college debt is still a burden: Debtors are likely to postpone buying a new car, much less buying a home.
Glenn Reynolds has more in The Higher Education Bubble.